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Navistar to Restate Results Back to 2002

2006-04-07 14:34:42

CHICAGO - Truck and bus maker Navistar International Corp., which has been sorting through accounting problems for months, said Friday it has dismissed its auditors and will restate financial results dating back to 2002.

The restatements will cover fiscal years 2002-04 and the first nine months of fiscal 2005, Navistar said.

As part of accounting overhaul, the parent of International Truck and Engine Corp. said its board of directors has fired Deloitte & Touche as its auditor and hired KPMG. The Warrenville, Ill.-based company said that because of the change in auditors, it still doesn't know when it will file its overdue 2005 annual report or issue first-quarter results for 2006.

Navistar warned investors two months ago that it might have to restate results. The problems first surfaced in January, when it said it was unable to file its annual report on time because of accounting issues concerning leases to affiliates and the timing of some booked sales.

The tardiness has rankled shareholders, who accused the company of violating financial reporting requirements. Navistar disputed the allegation in a regulatory filing in February.

Shares in the company, which halted trading temporarily when Navistar announced the need for restatement, declined 9 cents to $27.87 in afternoon trading on the New York Stock Exchange. They already were down nearly 25 percent from a year ago, weighed down by a protracted slump in the heavy-duty truck market.

Bill Caton, Navistar's executive vice president for finance, said numerous items must be restated, accounting for external funding of product development programs, timing of amounts collectible, warranties and shifting balances and expense amounts. He said the review process continues and will likely result in more items to be corrected.

But Caton maintained that Navistar's business continues to be strong and cited a record 10,856 orders for heavy-duty trucks in March, compared with 6,854 in February, as a sign of resurgence.

"Our medium truck orders were the highest in 30 years, and by the end of April the production rate at our Springfield plant will be 200 trucks per day and nearly the same at our Chatham plant," he said.

The company also said it is hiring a new interim corporate controller - James Blanda, a partner with the Tatum LLC consulting firm and formerly chief financial officer for the Chicago Stock Exchange and controller for Sears, Roebuck and Co.

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